UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) APRIL 22, 1998
LASER MORTGAGE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 001-13563 22-353916
(State or other (Commission (IRS Employer
jurisdiction of File Number) ID Number)
incorporation)
51 JOHN F. KENNEDY PARKWAY, SHORT HILLS, NEW JERSEY 07078
--------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (973) 912-8770
N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On April 22, 1998, the Registrant issued a press release announcing its
earnings for the quarter ended March 31, 1998. The complete text of the news
release is set forth as Exhibit 20 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Statements
None.
(c) Exhibits
20 News Release, dated April 22, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LASER MORTGAGE MANAGEMENT, INC.
By: /S/ THOMAS G. JONOVICH
Name: Thomas G. Jonovich
Title: Chief Financial Officer
Dated: April 23, 1998
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
20 News Release, dated April 22, 1998.
Exhibit 20
LASER MORTGAGE MANAGEMENT, INC.
ANNOUNCES 1ST QUARTER EARNINGS
Short Hills, N.J., April 22, 1998. LASER Mortgage Management, Inc.
(NYSE:LMM) reported net income for the first quarter ending March 31, 1998 of
$8,530,000, or $0.43 per common share based on 20,045,000 weighted average
common shares outstanding during the quarter. The first quarter of 1998
represents the first full quarter of operation for the Company.
Michael Smirlock, Chief Executive Officer of the Company, said "In light of
the volatile market for mortgage products and continued pressure on spreads, we
are satisfied with the results of our first full quarter of operations. We
expect prepayment uncertainty and pressure on spreads to continue over the
near-term before stabilizing, creating additional opportunities for the Company
to deploy more of its capital in higher yielding assets that should enhance the
net interest income of the Company."
"Mortgage valuations were hurt over the first quarter by unexpectedly
higher mortgage prepayment rates resulting from the decline in interest rates.
The government agency mortgage pass-through portfolio owned by the Company,
which comprises almost 90% of total assets, consists primarily of securities
that the Company's analysis showed should exhibit less prepayment sensitivity to
interest rates than generic pass-throughs. This analysis was borne out in the
first quarter as prepayment speeds on the Company's pass-through portfolio were
approximately 8.7% constant prepayment rate (CPR) while prepayments on generic
conventional government agency pass-throughs were approximately 16.3% CPR or
almost twice as fast as Company-owned collateral. The Company owns no adjustable
rate mortgages (ARMs)."
"The net interest rate spread (IRS) on the Company's assets (including
cash) for the first quarter was 1.16%. This IRS is exclusive of hedging costs.
Adjusting for the negative carry and cost of hedges results in a hedged IRS of
0.69%. The Company, through the sale of mortgage derivatives and pass-throughs,
generated a capital gain of $0.01 per share."
"Over the quarter, the Company continued to identify successfully and
acquire mortgage and non-mortgage assets that met or exceeded the Company's
equity return targets and added to earnings. These assets included subordinate
classes in commercial mortgage and asset-backed structures (such as home equity
loans) as well as direct loans."
"Going forward, the Company expects to continue to try to increase earnings
through several different avenues. First, we intend to continue to acquire
mortgage and non-mortgage assets that will add to earnings. Second, we are
evaluating various strategic alternatives to provide a consistent flow of
attractive and high income producing loans and securities, including
correspondent relationships and joint ventures. Third, the Board of Directors
has authorized the evaluation by management of the structure and benefits to the
REIT of internalization of the manager."
"The Company remains committed to enhancing stockholder value through
its business strategy of acquiring, hedging and funding primarily mortgage
securities that provide investors significant income flows and a high return on
equity."
<TABLE>
<CAPTION>
LASER MORTGAGE MANAGEMENT, INC.
Statement of Operations
For the Quarter
Ended
March 31, 1998
<S> <C>
Interest income $ 55,769,000
Interest expense (45,144,000)
--------------
Net interest income 10,625,000
Gain on sale of securities 134,000
Management fee (705,000)
Incentive fee (951,000)
Other operating expenses (573,000)
--------------
NET INCOME $8,530,000
==============
Basic earnings per share $ 0.43
Diluted earnings per share $ 0.40
Dividends declared per common share $ 0.43
Average number of shares outstanding 20,045,000
Non interest expense as a percentage of
average assets (annualized) 0.22%
LASER MORTGAGE MANAGEMENT, INC.
Balance Sheet
As of
March 31, 1998
ASSETS
Investments in securities at fair value $ 3,755,404,000
Cash and cash equivalents 85,782,000
Accrued interest receivable 22,227,000
Receivable for securities sold 21,860,000
---------------
TOTAL ASSETS $ 3,885,273,000
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Repurchase agreements $ 3,532,480,000
Payable for securities purchased 53,684,000
Accrued interest payable 11,016,000
Contractual commitments at fair value 9,796,000
Dividends payable 8,619,000
Accounts payable 1,158,000
-----------------
TOTAL LIABILITIES 3,616,753,000
STOCKHOLDERS' EQUITY
Common Stock: par value $.001 per share;
100,000,000 authorized, 20,044,999
shares issued and outstanding 20,000
Additional paid-in capital 282,206,000
Net unrealized loss on securities (13,586,000)
Retained earnings (120,000)
--------------
268,520,000
---------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $3,885,273,000
==================
</TABLE>
LASER Mortgage Management, Inc. is a specialty finance company investing
primarily in mortgage-backed securities and mortgage loans. The Company will
elect to be taxed as a real estate investment trust under the Internal Revenue
Code of 1986, as amended. LASER Advisers Inc., a registered investment adviser,
manages the day-to-day operations of the Company. The executive offices of
LASER Mortgage Management, Inc. are located at 51 John F. Kennedy Parkway, Short
Hills, New Jersey 07078.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: STATEMENTS IN THIS PRESS RELEASE REGARDING LASER MORTGAGE
MANAGEMENT INC.'S BUSINESS WHICH ARE NOT HISTORICAL FACTS ARE "FORWARD-LOOKING"
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES.
Date: April 22, 1998
Contact: LASER Mortgage Management, Inc.
Robert Gartner, Vice President (973) 912-8770
